There is no single structural reform capable of changing reality, and that progress depends on cumulative and continuous reforms to make a real difference.
We have a clear and well-defined reform path, which it is committed to advancing with full effort to achieve its targets through partnership and transparency.
Dr. Mohamed Farid Saleh:
- A shift in net foreign assets from a deficit of USD 27.2 billion to a surplus exceeding USD 25.5 billion.
- Private sector participation increased from 35% to 54%, with a target of fully digitizing the investment climate within two years.
- Launch of a VC Fund and new industrial funds to enhance entrepreneurship and export capabilities.
There is no magic wand, and macroeconomic stability helps in addressing uncertainty. We respect market dynamics and consistently support private sector participation that delivers developmental impact.
Dr. Mohamed Farid Saleh, Minister of Investment and Foreign Trade (MIFT Minister), presented a comprehensive vision for developing Egypt’s business environment during his speech at the American Chamber Annual Iftar, affirming that economic reforms are being implemented through a gradual and cumulative approach aimed at achieving a real transformation in the investment climate.
Policy of Gradual and Cumulative Reforms
The Minister affirmed that what is currently being implemented consists of gradual reforms that accumulate over time to create a real transformation in the investment climate landscape, stressing that work is being carried out at the micro level, away from unrealistic solutions or “magic wands.”
He began his remarks by emphasizing that any reform of the investment environment cannot be achieved without a sound macroeconomic framework, including clear fiscal policies and disciplined monetary policies. He highlighted significant improvement indicators, represented by Egypt’s transition from a net foreign asset deficit of USD 27.2 billion to a surplus of USD 25.5 billion, describing it as a clear and important indicator of stability. He also noted that the primary surplus remains in positive territory, providing a stable platform for work and investment in a secure environment, alongside a decline in the inflation rate.
The Minister revealed a fundamental shift in investment ratios, noting that while public investments accounted for 65% compared to 35% for private investments between 2020 and 2024, recent reforms have led to private sector investments rising to around 53%–54%, with the remaining percentage of public investments declining. He emphasized that increasing private sector participation is the key indicator currently prioritized by the state.
He noted that some may assume MIFT can easily deliver rapid change, adding that Dr. Mahmoud Mohieldin fully understands what he means when he says that reform is not a matter of a “magic wand” to fix things.
He added: «Monetary reforms, for example, can be implemented by adjusting the exchange rate or currency policies, and the markets respond to this quickly, as do fiscal policies; when tax rates are adjusted, economic activity is immediately affected. But improving the investment environment is a completely different matter; there is no magic wand to fix it».
He stressed the need to work at the micro level in a gradual and cumulative manner, by identifying each problem individually and addressing it separately, and then bringing these reforms together to ultimately achieve a genuine improvement in the investment climate.
He also emphasized that achieving this requires changing outdated beliefs and practices, particularly the regulatory authorities’ intervention in assessing companies during mergers and acquisitions.
He stated clearly: «This is not our role; our role is regulation, oversight, and monitoring, not intervening in pricing or valuation decisions between companies,” noting that stopping such intervention would save significant time for companies and transform the process into one of facilitation rather than obstruction». He also referred to efforts to change the working approach within the General Authority for Investment and Free Zones (GAFI) and MIFT, so that merger and acquisition processes are transformed into streamlined and facilitated procedures.
Digital Transformation
The Minister explained that streamlining procedures and digital transformation will not happen simultaneously across all government entities, given the numerous bodies involved in the licensing system (The Egyptian Drug Authority (EDA), New Urban Communities Authority, Industrial Development Authority (IDA), and others).
He anticipated that the system would become fully integrated and seamless within two to two and a half years, emphasizing that the Ministry is currently working on linking and coordinating the work of five different entities to ensure that procedures do not become «bottlenecks» for companies' expansion.
The Minister acknowledged the difficulties currently facing investors, noting that the first step is to truly understand these challenges. For example, he said, «We are aware of the problems companies face when increasing capital, and the lengthy procedures required for investors to obtain shares. Therefore, we are currently working on linking and coordinating the work of five different entities, including, the Financial Regulatory Authority (FRA) the Companies Registry, and others, to ensure that procedures do not become bottlenecks for companies' expansion».
Entrepreneurship
The Minister devoted significant attention in his speech to entrepreneurship, emphasizing that the core of any country’s economy relies on entrepreneurs and innovation. He noted that innovation does not stem solely from large corporations—despite their importance—but primarily originates from new entrepreneurial ideas.
He also affirmed ongoing efforts to establish a dedicated registry for start-ups to facilitate their access to licensing, and to adopt internationally recognized valuation standards for these companies in place of traditional local criteria. He noted his full awareness that one of the key challenges facing entrepreneurs in Egypt is the limited number of so-called Limited Partners (LPs)— investors who provide long-term financing. Nevertheless, Egypt ranked second in Africa in attracting start-ups funding, according to a report by Magnet.
The Minister also announced the establishment of a dedicated Venture Capital (VC) fund that will co-invest alongside funds providing long-term financing, with the aim of strengthening support for start-ups, helping them grow, and attracting further investment.
Sustainability, Carbon Markets and IRX Certificates
In the sustainability file, the Minister announced a plan to move from Voluntary Carbon Markets (VCM) to compliance or mandatory markets, in coordination with the relevant ministries, such as the Ministry of Finance and the Ministry of Environment, along with other entities that work with us.
He pointed out that the establishment of a mandatory carbon market will contribute to increasing the price of Egyptian carbon certificates, as what can be sold for about $5 in the VCM may rise in price to $15 or $20 when it becomes a compliance market that adheres to the provisions of Articles 6.1 and 6.4 of the United Nations Framework Convention on Climate Change (UNFCC).
The minister revealed the establishment of a registry for renewable energy projects seeking to obtain IRX certificates through a dedicated platform. This platform aims at helping solar and wind energy companies benefit from these certificates as an additional support mechanism.
He added that the ministry is working on developing a specialized platform to assist renewable energy companies, particularly those generating electricity from wind or solar power, in obtaining and utilizing these certificates.
Financial Markets
Dr. Farid stressed that society will not reap the benefits of economic growth without an active capital market that allows citizens and young people to participate in the ownership of companies, which is a problem in terms of the limited participation of citizens in financial markets.
He added: «When we look at the reforms that have been implemented, such as the introduction of Electronic Know Your Customer (E-KYC), Digital Identity, and electronic contracting (e-contracting) at FRA, we see a clear impact. The number of new investors in the Egyptian market used to not exceed 20,000 annually, but now it has reached 300,000 in one year, then 250,000 last year, and we expect to reach about 280,000 new investors this year. This growth has been achieved thanks to the adoption of technology and digital transformation».
He explained that the reliance on Digital Identity and e-contracting (E-KYC) has increased the number of new investors from 20,000 investors annually to nearly 300,000 investors, an approach that will be generalized in the investment environment as a whole.
Industrial Funds to Boost Exports
Regarding trade, the Minister emphasized that the situation is more challenging given current global developments. He noted that the Ministry is taking significant steps to strengthen communication with Egypt's global trading partners and exporters, and to build the necessary capacity.
Dr. Farid emphasized the importance of coordination with the Ministry of Industry and all state institutions to unleash the production capacities of factories and farmers, considering this the cornerstone for increasing exports.
The Minister revealed plans to establish new investment funds, in cooperation with the Ministry of Finance, to provide the necessary financing for the growth of the industrial sector with an announcement expected soon after Ramadan.
The Minister concluded by affirming that the Ministry is aware of the challenges and is addressing them transparently, stating, «When investors in Egypt—both Egyptian and foreign—are satisfied with the investment environment, they will convey this positive image to the world». He called upon the business community to share the message of the genuine transformation currently underway in Egypt.
